Chemplast Sanmar’s IPO remains undersubscribed so far on the last day of subscription. Investors have so far placed bids for only 33% of the whole IPO. Chemplast Sanmar is seeking to raise Rs 3,850 crore via the IPO, supplying shares in the fixed price tag band of Rs 530-541 per equity share of face worth Rs 5. Investors can bid for the challenge till Thursday evening in a bid lot of 27 shares and multiples thereafter. Chemplast Sanmar is a specialty chemical substances manufacturer with a focus on specialty paste PVC resin and custom manufacturing of beginning components and intermediates for pharmaceutical, agro-chemical and fine chemical substances sectors.
Subscription update
Retail investors are the only category of investors to have totally subscribed to their portion of the challenge. Retail investors have bid for 1.6 occasions their portion or for 1.16 crore shares. Non-Institutional Investors have bid for only 9% of the reserved portion, submitting bids for just 9.27 lakh shares against 1.08 crore on supply. Qualified Institutional Buyers (QIB) have so far placed for just 2% of their portion, bidding for 3.4 lakh equity shares against the 2.17 crore shares on supply. Overall bids have been placed for 1.29 crore equity shares against 3.99 crore shares that are on supply for investors.
In the grey market place, shares of Chemplast Sanmar have been trading at a weak premium of Rs 18-20 per share or just 3.7% of the IPO price tag. The grey market place premium for Chemplast Sanmar has come down because the IPO opened for subscription. The IPO is a mix of a fresh challenge of equity shares worth Rs 1,300 crore and an Offer for Sale (OFS) worth Rs 2,550 crore. Post-IPO, the promoter group shareholding in Chemplast Sanmar will drop to 55% from the present one hundred% when the public shareholding will enhance to 45%.
Hem Securities
Long-term Subscribe
Company is bringing the challenge at price tag band of Rs 530-541 per share at P/E various of 24 on post challenge FY21 EPS. Having a powerful market place position in speciality chemical substances, the enterprise is nicely-positioned to capture favourable business dynamics. Also, business in which the enterprise enjoys leadership position has higher barriers to entry. Hence seeking soon after all the above, we propose “Long Term Subscribe” on challenge.
Marwadi Financial Services
Subscribe (With Caution)
Considering the FY-21 adjusted EPS of Rs 25.95 on a post-challenge basis, the enterprise is going to list at a P/E of 20.85 with a market place cap of Rs 85,537 mn, when its peers namely PI Industries and SRF are trading at a P/E of 61.16 and 37.26 respectively. We assign a ‘Subscribe (With Caution)’ rating to this IPO as the enterprise is nicely-positioned to capture favourable business dynamics. The damaging net asset worth along with greater trade payable days keeps us cautious from a longer-term point of view.
Religare Broking
Positive view from extended term point of view
We think that CSL is nicely-positioned to advantage from the business development trends offered its diversified solution portfolio which diminishes the danger related with any distinct solution, vertically integrated manufacturing facilities and powerful parental assistance. On the monetary front, Its joint ventures and associate enterprise are posting losses from last 3 years, which remains a concern. Nonetheless, we have a positive view on the enterprise from extended term point of view.
Key Risks: i) Its joint ventures and associate enterprise are posting losses from last 3 years. ii) The enterprise has higher debt.